Continued commitment from partner Santarus, setting for potential U.S. launch of Ruconest
Santarus remains committed to the collaboration with Pharming, with management highlighting Ruconest as a key development pipeline component.
Collaboration terms.
In September 2010 Pharming granted SNTS the exclusive rights to commercialize Ruconest in the U.S., Canada, and Mexico, for the treatment of HAE and of other future indications.
*SNTS paid Pharming a $15 million upfront fee under the license agreement, followed by a $10 million milestone in November 2012, with readout of successful Phase III data in HAE.
*Pharming is eligible for a $5 million milestone payment upon FDA accepting the BLA submission for review, and a $20 million milestone based on the earlier of
1) first commercial sale of Ruconest in the U.S.
or
2) 90 days following FDA approval.
In addition, Pharming is entitled to the following sales-based milestones:
*a $20 million milestone for calendar net sales >$300 million
*a $25 million milestone for calendar net sales >$500 million
SNTS pays Pharming a tiered supply price, based on % of net sales:
*30% of net sales <$100 million
*32% of net sales between $100 million and $250 million
*34% of net sales between $250 million and $500 million
*37% of net sales between $500 million and $750 million
*40% of net sales >$750 million
Under the supply agreement, Pharming manufactures and supplies exclusively Ruconest to Santarus at the above mentioned supply prices.
Commercial prospects for Ruconest
At the 25th ROTH Conference, Santarus discussed the current landscape of HAE treatment, based on qualitative market research of physicians treating HAE patients. “Traditional” prophylaxis with steroids still sees broad usage, particularly in mild HAE patients. However, given adverse events in women, such treatments are of limited use but SNTS estimates that ~20-25% of patients are likely receiving steroid therapy, as shown in the figure below:
Source: SNTS Presentation, 25th ROTH Conference, March 2013.
The figure above shows that ~10-15% of the HAE patients that experience most severe attacks, with significantly impacted quality of life as well as life threatening and intense pain, are taking Cinryze (VPHM) in the prophylactic setting. The majority of patients (60-70%) are currently on HAE therapy for the treatment of acute attacks, and receive Berinert, Kalbitor, and Firazyr. Physicians note that patient preference strongly influences the choice of treatment, as Firazyr is associated with injection site reactions, and Kalbitor has a black box warning for anaphylaxis (3.9% incidence in the registration study). Furthermore relapse or worsening of symptoms have been reported with Firazyr and Kalbitor
(source: Cicardi et al, NEJM, 2010, Aberer et al, Ann Allergy Asthma Immunol 2010, Lumry et al,
Ann Allergy Asthma Immunol, 2011).
Ruconest could position itself as a differentiated product, with a benign safety profile, to provide rapid relief to acute HAE attack symptoms.
Santarus is anticipating that a salesforce of 25 reps should be sufficient to target the allergy/immunology practices where the estimated ~6,000-8,000 U.S. HAE patients likely seek treatment. Recall that Ruconest benefits from Orphan Drug designation in the U.S., and that as a biologic product, it is expected to benefit from 12 years of data
exclusivity upon potential FDA approval. Ruconest also benefits from broad IP coverage, with two patents expiring in 2022 or 2024.
We believe that a base case scenario for potential Ruconest sales may be represented by recent entrant on the acute HAE market Firazyr (Shire), approved in May 2011 by the EMA and in August 2011 by the FDA for the treatment of acute HAE attacks. Shire posted Firazyr sales of $33 million and $116.3 million in 2011 and 2012, respectively. We believe that Firazyr may represent a better “apples to apples” comparison for Ruconest, in contrast to plasma derived Berinert, and Kalbitor which bears a Black Box warning.